The Challenge of Enforcing International Premarital Agreements

Dec 6, 2023 | Immigration

With the world becoming more connected (thanks to remote work, airplanes, and modern technology), more and more people find themselves moving often, and to different countries. But, what does this have to do with prenuptial agreements (a.k.a., prenups)? Well, a couple might get a prenup from a foreign country and then want to enforce it in the U.S. during a divorce. While prenups have a long history in the U.S., foreign prenups have only recently begun to be litigated by U.S. courts. Given the world’s increasing interconnectedness, these international prenups will likely come under U.S. scrutiny more often in years to come.

When negotiating or drafting a prenup, the expectation and hope is that it will be upheld. Yet, the certainty of upholding foreign prenups remains uncertain at best in most states. Unlike a fine European wine, foreign marriage contracts don’t always ‘import’ as well. Most countries conceptualize prenuptial agreements differently than they are understood in the U.S., which may result in less stringent requirements in their drafting. While many countries allow couples to choose a marital financial framework via a written agreement, England only recently recognized prenups, and like many U.S. jurisdictions, scrutinize the fairness of the prenup at both its execution and enforcement. 

 

Understanding Foreign Prenups

Many nations allow couples to define finances during their marriage through a contract that resembles a prenup. For instance, France allows for prenups with options such as separate property, community plus separate property, and all community property. However, these contracts differ significantly from U.S. prenups. Here, couples might decide on individual or shared property systems. Countries like France, Germany, Italy, Mexico, South Africa, Switzerland, and Thailand all permit such marriage contracts.

In these countries, couples consult a notaire (or notar in Germany) – a legal expert in premarital contracts. In many cases, these contracts don’t get vetted by separate lawyers. If couples want these agreements upheld in a U.S. court, it may be necessary for them to consult independent attorneys who can evaluate the language contained within the agreement, and might even consider drafting from scratch an agreement compliant with the U.S. state they intend to reside in. Unlike U.S. prenups, foreign prenuptial agreements often lack standardized U.S. legal language.

Here are a few examples of prenup variations around the world: 

  • France: “Contrat de Mariage.” French law offers several types of property regimes that couples can choose from in their prenup, such as separation of property or community of property.
  • Germany: “Ehevertrag.” German prenups can stipulate arrangements regarding property, alimony, and other financial matters. They are subject to certain legal restrictions to ensure fairness.
  • Italy: “Accordo Prematrimoniale.” Similar to other civil law countries, Italian prenups can outline how assets will be treated during and after marriage but must adhere to statutory property regimes.
  • Spain: “Capitulaciones Matrimoniales.” These agreements in Spain can include various stipulations about property and financial rights and obligations during the marriage.
  • Australia: “Binding Financial Agreements” (BFA). These can be made before, during, or after a marriage and include details about property division and spousal maintenance.
  • Canada: “Marriage Contracts” or “Prenuptial Agreements.” They are recognized and enforceable in Canada but must comply with provincial laws.
  • South Africa: “Antenuptial Contracts.” In South Africa, these contracts determine whether a marriage will exist in community of property or out of community of property, with or without the accrual system.
  • Japan: “Marriage Agreements” are less common and typically focus on property and inheritance matters.
  • China: “婚前协议” (Hūnqián xiéyì), meaning “Pre-marriage Agreement.” These agreements usually deal with property rights and obligations.

Notable New York Cases 

The law on recognizing foreign marriage contracts is limited, with New York being a notable exception. Several cases in New York have validated foreign prenuptial agreements. See Stawski v. Stawski, 843 N.Y.S.2d 544 (2007) (Germany); Van Kipnis v. Van Kipnis, 872 N.Y.S.2d 426 (2008) (France); Cohen v. Cohen, 93 A.D.3d 506 [1st Dept 2012] (France); De Ganay v. De Ganay, 261 A.D.2d 175 [1st Dept 1999] (France); and Stein–Sapir v. Stein–Sapir, 52 A.D.2d 115 [1st Dept 1976] (Mexico). Below, we have outlined a few: 

 

Stawski v. Stawski: 

Country: German prenup, New York divorce 

Prenup Upheld? Yes

Case Cite: Stawski v. Stawski, 843 N.Y.S.2d 544 (2007) (Germany)

In Stawski v. Stawski, the court faced the issue of determining the enforceability in New York of a prenuptial agreement validly created in Germany. The plaintiff, an American citizen, Lili Stawski, married the defendant, Axel, a German citizen, in 1975 and executed a prenuptial agreement under German law. She claimed a lack of understanding of the agreement’s terms, seeking to have it declared invalid in New York.

Lili cited several concerns, including her limited knowledge of German, the Axel’s higher education, lack of her own legal representation, and Axel’s family’s prior dealings with the law firm that drafted the agreement. However, these points were deemed insufficient to demonstrate unfair action by Axel, particularly given that the agreement was explained to Lili in English. 

The court also found no evidence of coercion during the agreement’s execution, noting Lili  neither displayed signs of duress nor posed questions to the notary at signing. Moreover, she adhered to the agreement’s terms throughout the marriage, managing separate bank accounts and her inherited properties.

The New York Appeals Court emphasized the state’s legal framework, which supports individuals making their own decisions through contractual agreements, including those executed in foreign countries. Drawing from New York’s public policy favoring enforcement, the court held that prenuptial agreements, even those executed abroad, are accorded the same presumption of legality as any other contract. A party challenging such an agreement must provide evidence of fraud or overreaching, which the plaintiff, Lili,  in this case failed to do. See Van Kipnis v Van Kipnis, 43 AD3d 71, 76-77, quoting Bloomfield v Bloomfield, 97 NY2d 188, 193.

The Court reasoned that such agreements are presumed to be legally valid, just like any other contract. To challenge the validity of such an agreement, a party must provide evidence of fraud or overreaching, such as the concealment of facts or misrepresentation. In this case, Lili failed to meet this burden and presented no evidence of wrongdoing. See Greschler v Greschler, 51 NY2d 368)

Ultimately, the court upheld the German prenuptial agreement, concluding that it was fair and valid. Lili’s concerns, such as her limited German language skills, were not sufficient to suggest deceit by the husband, especially considering that the prenup was explained to her in English and she signed it voluntarily.

 

Van Kipnis v. Van Kipnis: France

Country: French prenup, New York divorce 

Prenup Upheld? Yes

Case Cite: Van Kipnis v. Van Kipnis, 872 N.Y.S.2d 426 (2008) 

In Van Kipnis v. Van Kipnis, the central issue was whether a foreign prenuptial agreement from France prevented a fair division of property under New York law. The Appeals Court in this case affirmed the decision of the lower courts, which upheld the agreement’s enforceability.

The story starts with Claire Van Kipnis, a Canadian citizen, and Gregory Van Kipnis, a U.S. citizen, who married in Paris, France, in 1965. Prior to their wedding, Claire arranged for the drafting of a prenuptial agreement under the French Civil Code. She ensured that its terms were explained to Gregory in English by legal counsel. Both parties thereafter signed what the French call a “Contrat de Mariage.”

Under this agreement, the couple deviated from France’s customary community property system, adopting a ‘separation of estates’ regime. The agreement states that each spouse retains ownership of their personal property and is not responsible for the other’s debts, inheritances, or gifts received during the marriage. It also grants Claire full rights over her assets as per the law for individuals married under the separate estate system.

During their 38-year marriage in New York, the couple raised two children and jointly owned two properties. Gregory was employed in finance while Claire worked as a professor and was also the primary caretaker of the parties’ two children. Throughout their marriage, the parties maintained separate bank accounts and kept their assets separate, with the exception of the joint ownership of their two homes, which included a house in Massachusetts and an apartment in Manhattan.

In 2002, Claire initiated divorce proceedings. In the pre-trial phase, Gregory was allowed to use the 1965 prenuptial agreement as a defense against Claire’s equitable distribution claims. Claire argued that all property should be subject to equitable distribution under New York Domestic Relations Law §236 (B) (5), claiming that the 1965 agreement, drafted and executed in France, was intended only for property ownership during the marriage, not for distribution upon divorce. She contended that a prenuptial agreement cannot waive the right to equitable distribution without an explicit waiver. Gregory countered that the agreement clearly states the parties should keep their property separate, exempting non-jointly owned property from equitable distribution.

The court reaffirmed the strong public policy favoring individuals’ decisions through contractual agreements, including prenuptial agreements. The court reasoned that these agreements are interpreted based on the written expressed intent of the parties, with extrinsic evidence considered only when the agreement is ambiguous.

Furthermore, the court stated that prenuptial agreements addressing property ownership, division, or distribution must align with New York’s Equitable Distribution Law, specifically Domestic Relations Law §236 (B). This law stipulates that marital property should be distributed equitably upon dissolution unless a validly executed prenuptial agreement under §236 (B) (3) specifies otherwise. The statute allows a prenuptial agreement to detail provisions for the ownership, division, or distribution of both separate and marital property, requiring it to be in writing, signed by the parties, and acknowledged or proven as required for recording deeds.

The court found that the parties’ written prenuptial agreement, categorized under “separation of estates,” specified that separate ownership applies to property acquired both before and during the marriage. Ultimately, the court determined that the clear and unambiguous terms of the French prenuptial agreement should be followed as written. 

 

De Ganay v. De Ganay: France

Country: French prenup, New York divorce 

Prenup Upheld? Yes

Case Cite: De Ganay v. De Ganay, **261 A.D.2d 175 [1st Dept 1999] (France)

In De Ganay v. De Ganay, the New York court faced the issue of validating and enforcing matrimonial judgments made by French courts under the doctrine of comity. Thierry and Frances De Ganay, who executed a prenuptial agreement in France in 1981 under French law, had dual residency and their children held dual citizenship. Frances, despite maintaining a second residence in France, initiated a divorce action in New York in 1994.

The New York court upheld the prenuptial agreement, emphasizing several key points. Frances could not overcome the presumption that Thierry maintained domicile in France, where the agreement was executed and governed. Their matrimonial domicile in France, dual citizenship of their children, and Frances’ substantial time spent in France reinforced their ties to the country. Additionally, Frances had the means and opportunity to engage in the French legal proceedings, as evidenced by her legal representation in France and her participation in early stages of the proceedings.

Consequently, the New York court affirmed the validity and enforceability of the French matrimonial judgments, aligning with the doctrine of comity and finding no contradiction with New York public policy, despite Frances’ later non-participation in the French proceedings.

 

Karg v. Kern: Germany 

Country: German prenup, New York divorce 

Prenup Upheld? No

Case Cite: Karg v. Kern, 129 A.D.3d 620 [1st Dept 2015]

In Karg v. Kern, 129 A.D.3d 620 [1st Dept 2015], the enforcement of a German prenuptial agreement was denied by the court. The wife sought to invalidate the couples’ German prenuptial agreement. The Appellate Division of the New York Supreme Court determined there was significant evidence backing the lower court’s decision that the contract was fraudulent under German law. This decision by the lower court was upheld on appeal.

The determination was based in part because the wife didn’t understand German well and wasn’t provided with the prenup agreement prior to signing. Thus, she did not have a chance to consult legal counsel. Additionally, the notary involved was known to the husband’s parents, who paid for his services and were present during the contract signing. Despite this, the notary failed to provide an English translation of the document. The Judge further noted that the husband had informed his wife he wanted her signature merely to ensure she wouldn’t stake a claim on his father’s substantial wealth. Both parties’ expert witnesses concurred that German law was applicable, and the contract didn’t stand up to its scrutiny. (It’s worth noting that the husband gave up his argument that New York law should be used.)

This case was contrasted with a previous one, outlined above, Stawski, which had upheld a German prenup. It remains to be seen if this indicates a shift in New York’s usual stance on recognizing foreign prenuptial agreements.

 

In conclusion, the enforcement of international premarital agreements in the United States, particularly in a state like New York, presents a complex and evolving legal landscape. The cases of Stawski v. Stawski, Van Kipnis v. Van Kipnis and De Ganay v. De Ganay demonstrate a willingness of U.S. courts, especially in New York, to recognize and uphold prenuptial agreements executed under foreign laws, provided they meet certain criteria of fairness and mutual understanding.

The case of Karg v. Kern signals a more cautious approach when there are indications of fraud, coercion, or lack of understanding due to language barriers. This case highlights the critical importance of transparency, fair representation, and understanding of legal terms in prenuptial agreements, regardless of the jurisdiction in which they are created.

As international moves become more common, the challenge for attorneys and couples alike is to navigate these differences in legal systems and ensure that foreign prenuptial agreements are not only fair and equitable but also legally enforceable in multiple jurisdictions. Ultimately, the enforceability of foreign prenuptial agreements in the U.S. hinges on a balance between respecting the autonomy of the contracting parties and the legal standards of fairness and equity. As we move forward in an increasingly globalized world, the recognition of international premarital agreements is likely to become more common, necessitating a more harmonized approach across different jurisdictions.

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